Influencing ATM Usage through Service Design

CASE STUDY INFLUENCING ATM USAGE THROUGH SERVICE DESIGN Designing an ATM service that minimizes the use of other bank ATMs by a bank’s customers GUTS SERVICE DESIGN WWW.GUTSE.IN

Guts Service Design Methodology > Insights Insights about the Market, Consumer Behaviour, Technology Trends, Industry Practices and Company’s Positioning, to identify gaps in service offerings > Disruptive and Incremental Value Propositions Value Propositions for radical, market altering innovation and incremental, experience enhancing innovation. > Validation Validate these value propositions through discussions with Client and interviews with customers > Business Case A business case for the viability and profitability of the short-listed Value Propositions > Prototyping Build Service Prototypes to test innovations > Blueprint for Deployment Make a blueprint for large scale deployment GUTS SERVICE DESIGN WWW.GUTSE.IN

Service Problem Reserve Bank of India mandates that from April 1, 2009 banks cannot charge their customers for the use of ATMs owned by other banks. However, when BANK A’s customer uses BANK B’s ATM, BANK B charges Bank A Rs.17 per transaction. Until now, this charge was passed on the customers. GUTS SERVICE DESIGN WWW.GUTSE.IN

Implications BANK A is a mid-sized bank with a small ATM network. In the absence of any extra charges, BANK A’s customers are likely to use ATMs owned by other banks which are more conveniently located and when BANK A’s ATM is not available. BANK A is saddled with the cost of this usage, without being able to pass it on to customers. GUTS SERVICE DESIGN WWW.GUTSE.IN

Service Design Goals 1) Minimize the use of other bank ATMs by BANK A’s customers 2) Understand ATM usage patterns and create a more meaningful ATM experience GUTS SERVICE DESIGN WWW.GUTSE.IN

USAGE SCENARIOS > REGULAR USE ATM > HOME CITY EMERGENCY CASH WITHDRAWAL > OUSTATION CASH WITHDRAWAL GUTS SERVICE DESIGN WWW.GUTSE.IN

REGULAR USE ATM The ATM that a customer uses for regular withdrawal of money and to avail other services GUTS SERVICE DESIGN WWW.GUTSE.IN

”Why do you use ATMs of other banks?” “ Its located very close my house “ My Husband has an account there, we go to the ATM together “ There is always a long line at my bank’s ATM “ Its on the way to my office “ Because there’s no difference in service between my bank’s ATMs and other ATMs “ Its FREE now! I can use whichever ATM I want GUTS SERVICE DESIGN WWW.GUTSE.IN

”Why didn’t you use other bank’s ATMs earlier?” “ I didn’t know my card works at all ATMs… I read in the papers that now I can use it at all ATMs “ …because earlier they charged me Rs.20 per transaction at other ATMs… now its free! GUTS SERVICE DESIGN WWW.GUTSE.IN

HOME CITY EMERGENCY CASH WITHDRAWAL When a customer runs out of cash and withdraws money from an ATM in an emergency, usually for a specific purpose. GUTS SERVICE DESIGN WWW.GUTSE.IN

”When do you need to withdraw cash in an emergency?” “ When I’m out shopping and run out of cash “ If I go to pay bills and don’t have enough cash When I get out of a cab and don’t have cash “ to pay the fare “ When I eat at a restaurant and find that I’m out of cash GUTS SERVICE DESIGN WWW.GUTSE.IN

ATM USE WHILE TRAVELLING When a customer uses an ATM in a new city, while on a business trip or vacation GUTS SERVICE DESIGN WWW.GUTSE.IN

”When you’re travelling, would you use any bank ATM you find?” “ Yes, ofcourse ! I don’t know where my bank’s ATM is located and even if I did, who’s going to go looking for it?? Even if I have to pay a little extra, I’d use the ATM that’s close to where I’m staying or near the station GUTS SERVICE DESIGN WWW.GUTSE.IN

SERVICE FACTORS What influences the ATM usage behaviour of customers? GUTS SERVICE DESIGN WWW.GUTSE.IN

location convenience cost ancillary services non-cash transactions travel shopping long lines at ATM restaurants Bill Payment GUTS SERVICE DESIGN WWW.GUTSE.IN

Insight 1 Until the RBI mandate, the use of other banks ATM was chargeable. This Charge of Rs.20 was a ‘DISINCENTIVE’ for customers and made them use their own bank’s ATM except in an emergency. In absence of this ‘disincentive’, the bank needs to create an INCENTIVE for their customer to prefer using their own ATMs. GUTS SERVICE DESIGN WWW.GUTSE.IN

Incentivize the use of the bank’s own ATMs Why should I use only my own bank’s ATM when using any ATM is free? GUTS SERVICE DESIGN WWW.GUTSE.IN

REWARD POINTS Create a system of reward points, awarded for using the bank’s own ATMs and redeemable for holidays, appliances and other products/services. This positive incentive replaces the earlier disincentive of a Rs.20 fee for using other bank ATMs GUTS SERVICE DESIGN WWW.GUTSE.IN

COUPONS Dispensing coupons (through the slip printer) with discounts on food and shopping, through marketing tie-ups with restaurants and shops. GUTS SERVICE DESIGN WWW.GUTSE.IN

Disincentives / Incentives ATM BANK A A Pre-April 2009 Rs.20 charge a disincentive to use other bank ATMs. Chooses to use own bank ATM and plans ATM BANK B cash withdrawal B April 1, 2009 C Post Service Design ATM BANK C Incentives to use own Cost disincentive to bank ATM: Reward points, use any bank’s ATM discount coupons, removed. Uses ATMs ancillary services. of other banks freely. GUTS SERVICE DESIGN WWW.GUTSE.IN

Insight 2 When there was a cost (DISINCENTIVE) to withdrawing money from other ATMs, a user planned cash withdrawals and was more careful not to run out of cash. In absence of this ‘disincentive’, the bank needs to create simple, intuitive tool to encourage the user to keep a track of his cash balance. GUTS SERVICE DESIGN WWW.GUTSE.IN

Help users record where and how much cash they spent CREATE A SMS BASED SERVICE that allows a user to send an SMS to her bank account when she spends her cash. This service will not only allow her to record and account for cash expenses, but will also send her an alert when her cash balance falls below a certain amount (or even when she overshoots her monthly shopping budget!) GUTS SERVICE DESIGN WWW.GUTSE.IN

Cash Management and Recording Record of cash She SMSes a transaction B transactions A to her bank account The transaction details are recorded in her Shopping, clothes, Globus bank statement. Rs. 2,500 This means she gets a break-up of even her cash transactions Custom Alerts C She can set alerts to be notified by SMS if her cash balance falls below a certain amount. Or even if she exceeds a pre-set shopping budget! GUTS SERVICE DESIGN WWW.GUTSE.IN

A bank statement currently only shows a single entry for ATM withdrawals. I don’t have any record of where the money was spent. The SMS service will allow a user to message details of cash expenses to her account. This will be incorporated into the bank statement to show detailed break-up of each cash withdrawal. GUTS SERVICE DESIGN WWW.GUTSE.IN

Only 70% of ATM activity is cash-withdrawal. 30% is non-cash and doesn’t require physical contact Make all non-cash activities mobile phone centric. This includes checking A/c balance, seeing a mini-statement, stop cheque orders and other transactions. Promote this heavily so that a customer will simply reach for his mobile phone and think about going to an ATM only for cash withdrawal. GUTS SERVICE DESIGN WWW.GUTSE.IN

Insight 3 LOCATION and PROXIMITY replace COST as the factor for choice of ATM. The cost disincentive can be reinstated by providing a reward incentive. But if it isn’t easy to find a bank’s ATM, the customer will forgo the rewards incentive in favour of proximity. GUTS SERVICE DESIGN WWW.GUTSE.IN

ATM locations on call Make your bank’s ATM easy to find. Can I SMS my location and find the closest ATM? If I book a flight to Srinagar, can I get a map with your ATMs marked, along with my ticket? Can I just call and ask for directions to an ATM? GUTS SERVICE DESIGN WWW.GUTSE.IN

ATM Signage Make it known that you have an ATM in the area. Put street signs, notices in shops and restaurants, location cards in hotel rooms… GUTS SERVICE DESIGN WWW.GUTSE.IN

Insight 4 Apart from hard factors like cost and proximity, the usability of the ATM will also start mattering now. A bank cannot get away with a dirty ATM, peeling wall paint and badly designed User Interface. Banks will have to work on improving the user experience inside the ATM. This will not only help retain their customers, but attract customers from other banks GUTS SERVICE DESIGN WWW.GUTSE.IN

Design the ATM for everyone Make the ATM accessible and useful for all categories of customers. This includes the user interface, bouquet of ancillary services, notices within the ATM etc… GUTS SERVICE DESIGN WWW.GUTSE.IN

ATM Experience for Youth Design an ATM experience that appeals to young users. While they don’t have too much money, they withdraw smaller amounts more often and can cost the bank a lot if they use another bank’s ATM GUTS SERVICE DESIGN WWW.GUTSE.IN

THANK YOU. We would love to hear from you. Please send your comments to abhi@gutse.in GUTS SERVICE DESIGN WWW.GUTSE.IN

If you like this case study, please visit www.gutse.in for more case studies, articles and resources on Service Design GUTS SERVICE DESIGN WWW.GUTSE.IN

“ We use logic to prove and intuition to discover Henri Poincaré French mathematician, theoretical physicist and ‘philosopher of science’ GUTS SERVICE DESIGN WWW.GUTSE.IN

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Influencing ATM Usage through Service Design

by Guts Service Design on May 19, 2009

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